THE ROLE OF TRANSPORTATION IN LOGISTICS CHAIN

1 THE ROLE OF TRANSPORTATION IN LOGISTICS CHAIN Yung-yu TSENG PhD Candidate Transport Systems Centre University of South Australia GPO Box 2471 Adelaide, South Australia 5001 Australia Fax: +61-8-8302-1880 Email: Wen Long YUE Program Director Transport Systems Centre University of South Australia GPO Box 2471 Adelaide, South Australia 5001 Australia Fax: +61-8-8302-1880 Email: Michael A P TAYLOR Director Transport Systems Centre University of South Australia GPO Box 2471 Adelaide, South Australia 5001 Australia Fax: +61-8-8302 1880 Email: Abstract: The operation of TRANSPORTATION determines the efficiency of moving products.

2 The progress in techniques and management principles improves the moving load, delivery speed, service quality, operation costs, the usage of facilities and energy saving. TRANSPORTATION takes a crucial part in the manipulation of logistic. Reviewing the current condition, a strong system needs a clear frame of LOGISTICS and a proper transport implements and techniques to link the producing procedures. The objective of the paper is to define the role of TRANSPORTATION in LOGISTICS for the reference of further improvement.

3 The research was undertaken to assist LOGISTICS managers, researchers and TRANSPORTATION planners to define and comprehend the basic views of LOGISTICS and its various applications and the relationships between LOGISTICS and TRANSPORTATION . Key Words: LOGISTICS , TRANSPORTATION , City LOGISTICS 1. INTRODUCTION Since LOGISTICS advanced from 1950s, there were numerous researches focused on this area in different applications. Due to the trend of nationalisation and globalisation in recent decades, the importance of LOGISTICS management has been growing in various areas.

4 For industries, LOGISTICS helps to optimise the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a LOGISTICS CHAIN is TRANSPORTATION system, which joints the separated activities. TRANSPORTATION occupies one-third of the amount in the LOGISTICS costs and TRANSPORTATION systems influence the performance of LOGISTICS system hugely.

5 Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum. The purpose of this paper is to re-clarify and redefine the position relationship between TRANSPORTATION and LOGISTICS systems through collecting and analysing various application Proceedings of the Eastern Asia Society for TRANSPORTATION Studies, Vol.

6 5, pp. 1657 - 1672, 20051657cases and practices in LOGISTICS from literatures. It is to provide a general framework and expect to be referred for further development and researches. The paper started from introducing the development of LOGISTICS and transport-related sectors based on a historical review. Afterwards it discussed the interrelationships of TRANSPORTATION and LOGISTICS . It expresses the benefits that TRANSPORTATION brings to LOGISTICS activities and vice versa.

7 For instance the increase of the efficiency of LOGISTICS also would bestead to release traffic load in the urban areas. Furthermore, some major LOGISTICS activities and concepts were also discussed in this paper. It especially presents City LOGISTICS independently due to it is considered as a main tendency and an available method of future integration of transport and LOGISTICS in the urban areas. Finally, this paper will discuss and conclude the potential further development of LOGISTICS systems.

8 2. OVERVIEW OF LOGISTICS Definitions Council of LOGISTICS Management (1991) defined that LOGISTICS is part of the supply CHAIN process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers requirements . Johnson and Wood s definition (cited in Tilanus, 1997) uses five important key terms , which are LOGISTICS , inbound LOGISTICS , materials management, physical distribution, and supply- CHAIN management, to interpret.

9 LOGISTICS describes the entire process of materials and products moving into, through, and out of firm. Inbound LOGISTICS covers the movement of material received from suppliers. Materials management describes the movement of materials and components within a firm. Physical distribution refers to the movement of goods outward from the end of the assembly line to the customer. Finally, supply- CHAIN management is somewhat larger than LOGISTICS , and it links LOGISTICS more directly with the user s total communications network and with the firm s engineering staff.

10 The commonality of the recent definitions is that LOGISTICS is a process of moving and handling goods and materials, from the beginning to the end of the production, sale process and waste disposal, to satisfy customers and add business competitiveness. It is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimising the goods- or service-producing network to fulfil customer requests; and utilizing the network to fulfil customer requests in a timely way (Tilanus, 1997).